HQ2: Understanding What Happened & Why

It is not in the local governments’ interests to create a race to the bottom. And given Amazon’s size and skills, it is no longer in their own interests to encourage governments to be giving out special tax breaks to its future competitors. Had they though this thorough, played out all of the game theory here, Amazon had the ability to lock in a strategic advantage.

Instead of capturing the lion share of tax breaks for themselves, they could have had the city commit ALL of the incentives to rebuilding the infrastructure around where they were locating the HQ2. Highways, subways, schools, parks, etc. This missed that chance.